Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2022

Assets and liabilities measured at fair value

Assets and liabilities measured and carried at fair value in the financial statements are summarized below (in millions):


	Level 1		Level 2		Level 3		Total
March 31, 2022
Assets:
Available for sale (“AFS”) fixed maturities:
U.S. Government and government agencies	$	208	$	1	$	—	$	209
States, municipalities and political subdivisions	—		1,624		33		1,657
Foreign government	—		257		—		257
Residential MBS	—		1,520		11		1,531
Commercial MBS	—		100		—		100
Collateralized loan obligations	—		1,894		—		1,894
Other asset-backed securities	—		2,320		337		2,657
Corporate and other	10		2,250		244		2,504
Total AFS fixed maturities	218		9,966		625		10,809
Trading fixed maturities	—		30		—		30
Equity securities	617		44		361		1,022
Assets of managed investment entities (“MIE”)	191		5,028		12		5,231

Total assets accounted for at fair value	$	1,026	$	15,068	$	998	$	17,092
Liabilities:
Contingent consideration — acquisitions	$	—	$	—	$	23	$	23
Liabilities of managed investment entities	187		4,914		11		5,112
Other liabilities — derivatives	—		5		—		5
Total liabilities accounted for at fair value	$	187	$	4,919	$	34	$	5,140

December 31, 2021
Assets:
Available for sale fixed maturities:
U.S. Government and government agencies	$	215	$	1	$	—	$	216
States, municipalities and political subdivisions	—		1,791		41		1,832
Foreign government	—		246		—		246
Residential MBS	—		946		14		960
Commercial MBS	—		104		—		104
Collateralized loan obligations	—		1,643		—		1,643
Other asset-backed securities	—		2,398		278		2,676
Corporate and other	11		2,402		267		2,680
Total AFS fixed maturities	226		9,531		600		10,357
Trading fixed maturities	—		28		—		28
Equity securities	679		50		313		1,042
Assets of managed investment entities	390		4,893		13		5,296

Total assets accounted for at fair value	$	1,295	$	14,502	$	926	$	16,723
Liabilities:
Contingent consideration — acquisitions	$	—	$	—	$	23	$	23
Liabilities of managed investment entities	384		4,823		13		5,220

Total liabilities accounted for at fair value	$	384	$	4,823	$	36	$	5,243

Changes in balances of Level 3 financial assets

Changes in balances of Level 3 financial assets and liabilities carried at fair value during the first three months of 2022 and 2021 are presented below (in millions). The transfers into and out of Level 3 were due to changes in the availability of market observable inputs. All transfers are reflected in the table at fair value as of the end of the reporting period.


			Total realized/unrealized gains (losses) included in
	Balance at December 31, 2021		Net earnings (loss)		Other comprehensive income (loss)		Purchases and issuances		Sales and settlements		Transfer into Level 3		Transfer out of Level 3		Balance at March 31, 2022
AFS fixed maturities:
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
State and municipal	41		—		(2)		—		(1)		—		(5)		33
Residential MBS	14		—		—		—		(1)		—		(2)		11
Commercial MBS	—		—		—		—		—		—		—		—
Collateralized loan obligations	—		—		—		—		—		—		—		—
Other asset-backed securities	278		2		(9)		47		(15)		34		—		337
Corporate and other	267		—		(10)		28		(7)		—		(34)		244
Total AFS fixed maturities	600		2		(21)		75		(24)		34		(41)		625
Equity securities	313		22		—		30		(3)		3		(4)		361
Assets of MIE	13		(1)		—		—		—		—		—		12
Total Level 3 assets	$	926	$	23	$	(21)	$	105	$	(27)	$	37	$	(45)	$	998

Contingent consideration — acquisitions	$	(23)	$	—	$	—	$	—	$	—	$	—	$	—	$	(23)
Total Level 3 liabilities	$	(23)	$	—	$	—	$	—	$	—	$	—	$	—	$	(23)


			Total realized/unrealized gains (losses) included in
	Balance at December 31, 2020		Net earnings (loss)		Other comprehensive income (loss)		Purchases and issuances		Sales and settlements		Transfer into Level 3		Transfer out of Level 3		Balance at March 31, 2021
AFS fixed maturities:
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
State and municipal	39		—		—		—		—		—		—		39
Residential MBS	38		(3)		—		6		—		3		(17)		27
Commercial MBS	2		—		—		—		—		—		(2)		—
Collateralized loan obligations	16		1		(1)		—		(1)		—		(9)		6
Other asset-backed securities	305		—		—		52		(23)		14		(22)		326
Corporate and other	138		1		(1)		84		(18)		2		(2)		204
Total AFS fixed maturities	538		(1)		(2)		142		(42)		19		(52)		602
Equity securities	176		53		—		12		(14)		—		—		227
Assets of MIE	21		4		—		1		—		—		(12)		14
Assets of discontinued annuity operations	2,971		70		(43)		196		(191)		32		(229)		2,806
Total Level 3 assets	$	3,706	$	126	$	(45)	$	351	$	(247)	$	51	$	(293)	$	3,649

Liabilities of discontinued annuity operations	$	(3,933)	$	(40)	$	—	$	(74)	$	93	$	—	$	—	$	(3,954)
Total Level 3 liabilities	$	(3,933)	$	(40)	$	—	$	(74)	$	93	$	—	$	—	$	(3,954)

Changes in balances of Level 3 financial liabilities


			Total realized/unrealized gains (losses) included in
	Balance at December 31, 2021		Net earnings (loss)		Other comprehensive income (loss)		Purchases and issuances		Sales and settlements		Transfer into Level 3		Transfer out of Level 3		Balance at March 31, 2022
AFS fixed maturities:
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
State and municipal	41		—		(2)		—		(1)		—		(5)		33
Residential MBS	14		—		—		—		(1)		—		(2)		11
Commercial MBS	—		—		—		—		—		—		—		—
Collateralized loan obligations	—		—		—		—		—		—		—		—
Other asset-backed securities	278		2		(9)		47		(15)		34		—		337
Corporate and other	267		—		(10)		28		(7)		—		(34)		244
Total AFS fixed maturities	600		2		(21)		75		(24)		34		(41)		625
Equity securities	313		22		—		30		(3)		3		(4)		361
Assets of MIE	13		(1)		—		—		—		—		—		12
Total Level 3 assets	$	926	$	23	$	(21)	$	105	$	(27)	$	37	$	(45)	$	998

Contingent consideration — acquisitions	$	(23)	$	—	$	—	$	—	$	—	$	—	$	—	$	(23)
Total Level 3 liabilities	$	(23)	$	—	$	—	$	—	$	—	$	—	$	—	$	(23)


			Total realized/unrealized gains (losses) included in
	Balance at December 31, 2020		Net earnings (loss)		Other comprehensive income (loss)		Purchases and issuances		Sales and settlements		Transfer into Level 3		Transfer out of Level 3		Balance at March 31, 2021
AFS fixed maturities:
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
State and municipal	39		—		—		—		—		—		—		39
Residential MBS	38		(3)		—		6		—		3		(17)		27
Commercial MBS	2		—		—		—		—		—		(2)		—
Collateralized loan obligations	16		1		(1)		—		(1)		—		(9)		6
Other asset-backed securities	305		—		—		52		(23)		14		(22)		326
Corporate and other	138		1		(1)		84		(18)		2		(2)		204
Total AFS fixed maturities	538		(1)		(2)		142		(42)		19		(52)		602
Equity securities	176		53		—		12		(14)		—		—		227
Assets of MIE	21		4		—		1		—		—		(12)		14
Assets of discontinued annuity operations	2,971		70		(43)		196		(191)		32		(229)		2,806
Total Level 3 assets	$	3,706	$	126	$	(45)	$	351	$	(247)	$	51	$	(293)	$	3,649

Liabilities of discontinued annuity operations	$	(3,933)	$	(40)	$	—	$	(74)	$	93	$	—	$	—	$	(3,954)
Total Level 3 liabilities	$	(3,933)	$	(40)	$	—	$	(74)	$	93	$	—	$	—	$	(3,954)

Fair value of financial instruments

The carrying value and fair value of financial instruments that are not carried at fair value in the financial statements are summarized below (in millions):


	Carrying		Fair Value
	Value		Total		Level 1		Level 2		Level 3
March 31, 2022
Financial assets:
Cash and cash equivalents	$	1,181	$	1,181	$	1,181	$	—	$	—
Mortgage loans	784		768		—		—		768
Total financial assets not accounted for at fair value	$	1,965	$	1,949	$	1,181	$	—	$	768

Long-term debt	$	1,917	$	1,979	$	—	$	1,976	$	3
Total financial liabilities not accounted for at fair value	$	1,917	$	1,979	$	—	$	1,976	$	3

December 31, 2021
Financial assets:
Cash and cash equivalents	$	2,131	$	2,131	$	2,131	$	—	$	—
Mortgage loans	520		533		—		—		533
Total financial assets not accounted for at fair value	$	2,651	$	2,664	$	2,131	$	—	$	533

Long-term debt	$	1,964	$	2,261	$	—	$	2,258	$	3
Total financial liabilities not accounted for at fair value	$	1,964	$	2,261	$	—	$	2,258	$	3